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Guest Column: Buy local to spur economy

April 18, 2012

By Paul Gorski

Buy locally” to spur the local economy was great advice offered by contributor Michael Kleen in his April 4-10 column “Five simple ways to jumpstart the economy.”

Buying locally supports local friends and family and lays the groundwork for the growth of local business into larger corporations. However, Kleen’s other proposed ways to “jumpstart” the economy would neither be simple nor effective, and I address them as follows:

1. Payroll Tax Holiday — A temporary Illinois payroll tax holiday wouldn’t address most businesses’ long-term payroll or capital funding concerns. What would be more effective would be having the banks lend small business the money the federal government gave them to lend to small business for capital improvement, rather than the banks holding back the money and investing it in treasury bonds, as some of them have done.

2. Sales Tax Holiday — A sales tax holiday on small items that people need to buy, like school supplies, would save residents some money, but it doesn’t create more sales or spur new business. What might be effective would be a sales tax holiday on durable household goods, appliances and furniture. Residents might be encouraged to upgrade now, rather than later. But as home sales drive durable good sales and home sales are down, this would not be likely to spur the economy much right now, but it wouldn’t hurt to try.

3. Repeal Blue Laws — Spur the economy through alcohol sales and horse racing? Alcohol sales are just fine, and while horse racing and gambling in general sometimes have short-term economic gains, you are still chasing after the same pool of entertainment dollars and not creating new economies. As far as car sales on Sundays, that’s a workplace rule to give sales people at least one day off a week. Seems like a reasonable worker protection to me.

4. Demolish Excess Housing — There’s only excess housing because housing was sold at low interest rates to folks whose real incomes have been steadily decreasing since 2001, and now the owners can no longer afford the homes. Bulldozing homes only to build other homes people can’t afford is not a solution.

Locally, we might be creating some minimum-wage-level jobs, and that’s a start, but that only takes people off the unemployment insurance rolls, and does little to increase spending power. We need to invest in education and job training so our local residents can get better-paying jobs and spend that increased earning power — living-age jobs so we can buy, invest and grow locally.

In my April 4 guest column, “Growing your business: Print ads that drive sales,” I encouraged readers to respond to the article, with the chance to be my guest at a fish fry dinner at the Rockford Lithuanian Club. I’ll be taking readers Jim Hutchison and Mary Gwardys out for dinner. Congratulations!

Paul Gorski is a Cherry Valley Township resident and a former Winnebago County Board member.

From the April 18-24, 2012, issue

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